Why it is worth getting into crypto mining even in a bear market

Smart IT Alliance GmbH
www.crypto-mining-farm.de

Since the beginning of the year, the crypto market has come under pressure. There are multiple reasons for that. On the one hand the Ukraine war, on the other hand the interest rate turnaround that is likely to increase significantly in the future, and the corona pandemic. Added to this is the recent crash of the stablecoin TerraUSD. All of this, and probably more, has caused cryptocurrency prices to fall. But the bear market does not necessarily have to be viewed pessimistically, on the contrary – it is possible to see this as an opportunity. Below we give you some reasons why it is worth getting into the mining business even during a bear market.

What is a bear market

To understand how you can profit from mining cryptocurrencies even during a bear market, let us first explain what such a bear market is.If the crypto market shows falling prices over a longer period of time, this is referred to as a bear market. Typically, these periods follow a previously positive, high-priced market. Money flows out of the market in the bear market as investors and traders appear more pessimistic than usual.On the other hand, one speaks of a bull market when prices rise.A bear market is often triggered by wars or social change, but the falling prices can also develop a momentum of their own and have no immediate cause.Such a bear market is not just limited to the cryptocurrency space, but applies to all financial markets.

What are the advantages of mining in the bear market

Against all odds, it can be profitable to enter the mining business exactly during such a bear market.First of all, the most important rule in the bear market is not to panic, but to pursue long-term strategies. As is well known, after a low there is also a high again and this is exactly why you can take advantage of the falling prices. In terms of hardware in particular, there are extremely good reasons to invest in new mining hardware precisely during the bear market.First of all, the availability of powerful hardware should be mentioned here. In the past, it happened time and again that the demand for ASIC miners significantly exceeded the supply, resulting in bottlenecks. In the middle of the bear market, this is usually not the case and so the miners can look forward to getting popular mining hardware faster again.In order to be able to mine lucratively, the acquisition costs for the required equipment should be as low as possible in order to be able to achieve pure profits as quickly as possible. In this context, the price of the ASIC miners is of course linked to the current market situation. Mining hardware buyers benefit when demand for ASIC miners has dropped, as this has an immediate impact on the price.

Another benefit of mining in the bear market relates to mining difficulty. In order to keep to the processing time of 10 minutes per bitcoin block, the difficulty of the tasks to be solved is continuously adjusted. The more participants join the Bitcoin network and accordingly make more computing power available, the more difficult it becomes for the individual participant to solve the "arithmetic task".If other miners exit, e.g. due to capital shortages in the bear market, the computing power decreases, which means that the difficulty is adjusted downwards. Those who then continue to mine can potentially earn more Bitcoin due to the lower effort.In summary, it can be said that there is also a lot of potential in the bear market if you are interested in mining.